Contact center industry sees recovery in second sem

Published May 7, 2020, 12:00 AM

by manilabulletin_admin

By BERNIE CAHILES-MAGKILAT

Despite the adverse impact on revenues and jobs, the Philippine contact center sector, which accounts for 60-65 percent of total IT-business process management (IT-BPM) industry in the country, is confident of a rebound in the second semester this year stressing the fundamental competitive advantages of the industry have not been decimated by the COVID-19 pandemic.

CCAP Logo
CCAP Logo

CCAP President Jojo Uligan said they are seeing a rebound in the third and fourth quarters this year from the slump in the first semester.

Uligan explained that majority of the contracts happen in the third and fourth quarters of the year. Traditionally, he explained, the first half of the year has always been slower because that is the end of the peak of season and end of contracts that they have serviced.

H. Karthik of Everest Consulting said that although this is a tough time for IT-BM industries in the Philippines, the contact center industry growth always surpasses the entire global offshoring.

Most of all, Karthik said, “The fundamentals of the Philippine IT-BPM sector which are the talent pool and its scale have not really changed.”

Karthik said the industry will rebound as companies take on costs. “The BPO segment is likely to witness a lot of work that need to get done,” he said.

Real opportunities

“These are not just silver lining, but the opportunities are real,” he said citing opportunities in other segments in contact centers such as healthcare where volume has spiked.

The Philippines being a more established contact center destination and the role of digital platforms coming would create more efficiency and resilience of the industry, he said.

Of course, there were opportunities lost that the industry has to reckon with and compute, but Uligan stressed that: “Once the enhanced community quarantine (ECQ) is lifted, clients will require more people so we take advantage of higher volume in the third and fourth quarters to recover the losses from the pandemic in the first two quarters.”

Some volumes have been affected like the number of calls and chats as industries like insurance and hospitality took a hit, but he said, there are also businesses with positive impact like retail and logistics where volumes continue to grow so we are just balancing it out.

With that companies were able to shift people to programs that have higher volume.

“So far, we have not heard of any clients shutting down or bringing back jobs to their geographies, most of our clients are in the US. In fact, some firms are entertaining talks of expansion and new logos coming in and some are implementing with new clients as we speak,” Uligan said.

Tonichi Parekh, CCAP board director, also admitted that recruitment really slowed down during the start of the lockdown in March but it came back in April.

Revisit

At the start of this year, CCAP was projecting of 4-5 percent growth this year. Last year, CCAP added 77,000 workers. CCAP also generates on the average 70,000 to 90,000 workers annually.

Both Uligan and Karthik agreed though, the need to look at revenue projections based on effect of COVID-19 and a revisit the IBPAP Roadmap 2022 once the numbers are aligned with the clients and partners.

“I’m sure even our clients will revisit their projections for 2020 and make certain adjustment whether going up or it just been going down. So, that’s all part of the alignment and recalibrations that we need to do,” Uligan said.

Thus, Karthik called for better connectivity not just for the contact center industry but to the broader ecosystem of the economy.

The country’s GDP and the global economic recession though have been factored in. But the lower GDP will affect more of the B and C segments business model but not the BPO, which is largely a B to B business, he said.
Thus, even with the expected global recession, he said, the con¬tact center industry is expected to perform better than the global economy.

Work from home

During the ECQ period, Uligan said their industry did not really stop operation during the ECQ. In fact, 30-35 percent of their workforce are working from home and 10-20 percent are part of the onsite skeletal workforce.

Parekh also noted that the work from home (WFH) would be the new normal after the ECQ and this would even grow higher.

“The 30-35 percentage of workers working from home is not going down and in fact is prepping up,” said Parekh.

During the ECQ, CCAP said that members continued to give their workers salary even without work during the first month and will continue to provide the regular benefits until the extended ECQ.

Contact centers also observed the government imposed protocols on operations like social distancing, wearing of masks and thermal scanners.

Members were also expected to be compliant with the provision for appropriate sleeping accommodation of workers.

Telco

CCAP officials also stressed the need to work with telco partners as there would be higher demand for more bandwidth for the residential as witnessed during the lockdown. “We’ve provided Wi-Fi to workers working from home and those not stable connections we have to use the telco capabilities,” said Uligan.

Karthik noted that India, the world’s top IT-BPM destination, is expected to emerge better than the Philippines after COVID because they were prepared in their infrastructure particularly telco that made it easier for them to make WFH mode operational during the lockdown.

Growth will be supported by the acceleration in digital adoption, he pointed.

Parekh stressed the telco infrastructure and government cooperation is crucial to the new normal.

 
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